Globecomm Systems sales, profits decrease
Globecomm Systems Inc., a satellite communication device manufacturer, yesterday reported sharply lower third-quarter sales and profits as government spending cuts took effect and the United States withdrew troops from Iraq.
The Hauppauge company said revenue dropped to $78.1 million during its fiscal third quarter ended in March, down nearly 30 percent from the same period last year. Net income fell 44 percent, to $4.2 million, or 18 cents per share.
Nonetheless, Globecomm chairman and chief executive David Hershberg said he was upbeat about his company's outlook.
"We continue to see strong government service contract renewals, and we remain focused on executing on our overall business plan and vision," Hershberg said in a statement announcing the results.
Globecomm, which derives roughly 20 percent of its revenue from the U.S. Army, is among several Long Island manufacturers whose sales have waned since federal lawmakers failed to reach a budget deal, triggering across-the-board federal spending cuts known as the sequestration.
On Tuesday Edgewood aircraft parts CPI Aerostructures Inc. blamed the cuts for a 13 percent fall in its first-quarter profits.
Globecomm's $78.1 million in third-quarter sales fell short of the expectation of analysts, who had predicted $81 million. In addition to being hampered by government spending cuts and the drawdown in Iraq, the results were lower because of a one-time $12.8-million equipment sale the company closed in 2012.
Globecomm released its results after the stock market closed Wednesday. Before that disclosure its stock had closed at $12.66 a share, up 1.28 percent.